China’s Seaborne Coal Imports Rise Despite Projections of Flat Volumes

China’s seaborne coal imports jumped by 17% in the first quarter compared to the same period of 2023, despite earlier expectations that overall coal imports this year would be largely flat versus last year.

Imports of all varieties of coal by sea into China stood at 97.43 million metric tons between January and March 2024, an increase of 16.9% from the 83.36 million tons imported in the same quarter last year, data compiled by commodity analysts Kpler and cited by Reuters columnist Clyde Russell showed on Tuesday.  

The estimated jump in seaborne coal imports contrasts with an earlier expectation that all of China’s coal imports this year would remain basically flat compared to 2023. 

Chinese coal imports this year are expected at around the record levels of 2023, an executive at China’s state-run utility Guangdong Energy Group said last month.

China’s coal imports jumped last year by 62% to a record high of 474.42 million metric tons, driven by high demand, lower-quality domestic coal, and higher domestic prices.

This year, imports are expected to be between 450 million and 500 million metric tons this year, Reuters quoted Wu Wenbin, head of coal management at Guangdong Energy Group, as saying last month.

But so far this year, coal output in China has wobbled after authorities in the northern province of Shanxi, the top coal-producing region, ordered in February miners to reduce production and carry out safety inspections between March and May, following several fatal incidents at mines in China in recent months.

Weaker coal prices and demand and mine closures due to safety checks are set to reduce coal output in the Shanxi province by 4% this year, for the first time in seven years, according to a plan announced by the provincial government.

In January and February 2024, total Chinese coal production declined by 4% compared to the same period of 2023, amid the safety checks in Shanxi.

This would mean higher Chinese coal imports this year, especially if overseas prices remain competitive with the domestic coal prices, which has been the case for a year now.

By Charles Kennedy for Oilprice.com

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